Argentina after the K anomaly

Hardly any new ideas, similar economic plans
and a surprising detachment on the part of the voters seem to characterize a
campaign that will end up with the election of a new president who ought to be
able to surpass Kirchnerism. Español.

Nestor y Cristina de Kirchner. Demotix. All rights reserved.

Argentina is
living through the last days of an
unusual presidential campaign, hitherto
characterized by the absence of ideas and strong proposals, by sudden shifts in the three candidates’ economic
platforms, and by a certain indifference
of civil society regarding the electoral
debate.

This scenario seems incomprehensible given
the extreme polarization that has
characterized politics in Argentina recently, its highest point being the death of controversial prosecutor Alberto Nisman
and the attempt
by the radical right opposition, backed by the Clarín media group, to hold
president Cristina Fernández de Kirchner responsible for it.

The first element to consider
in order to try to understand how the current situation has come about is the
Nisman affair. It is worth remembering, in particular, that the investigations have
revealed the "libertine" behaviour, to say the least, of the late
magistrate (photographed in the company of sex-toy carrying young escorts) and the
even more embarrassing connections with the US and Israeli secret services, with
the ultra-rightist members of Congress Patricia Bullrich and Laura Alonso, and
the “vulture funds” managed by US financier Paul Singer, who has been fighting
for years a fierce legal battle in New York against Argentina. As a result, the
Nisman case has ended up producing a boomerang effect on the opposition’s
ability to set the political agenda for the forthcoming elections and
strengthening President Fernández de Kirchner, whose popularity ratings have
reached unheard of levels for a president in her final term.

Cristina
Fernández’s renewed upswing has hit
the presidential candidates extremely hard, and has been instrumental in
defining their economic proposals and driving them to converge
on a common pattern of continuity
with the government’s current political
and economic agenda. Until then,
the opposition candidates had been
voicing their willingness to make a clean slate of the Kirchner legacy
and to carry out a policy of "change" consisting
in a revival, albeit partial, of the traditional neoliberal agenda of the nineties. The most striking case is Mauricio Macri’s, who started defending a "republican"
proposal for a minimal state and has gone so far as to build
the first statue of Perón in Buenos Aires
(a stronghold of the anti-Peronist
right) so as to appear "not so liberal,
not so gorilla-like" as he used to be.

This unexpected convergence has resulted in
the anesthetizing of the campaign and, consequently, in a loss of interest by
the voters. This should not,
however, confuse our analysis of the country’s likely scenarios in the near
future.

Even if this is unfortunately not new,
Argentina is facing today a difficult time which is known in economic jargon as the end of the
stop and go cycle. To put it simply: the phases of
sustained growth of the economy driven by domestic demand and public investment (as
was the case during the Kirchner decade)
generate a strong pressure on the
balance of payments (through imports) and are characterized by a tendency to
increasing inflation (reflecting the distributive struggle caused by the reduction of unemployment and rising
wages). This, in
turn, encourages capital flight and
dollar hoarding, threatening the level
of national reserves and thus
determining a continuous devaluation
of the peso (with a feedback effect on inflation).

As long as exports of
agricultural goods and the "commodities
super-cycle" guaranteed a generous dollar flow to the
Central Bank, the
growth model was successful. But the
fall in the price of soy, the continuing crisis in Europe and the recession in Brazil have led to a sharp slowdown in Argentine exports, threatening the
sustainability of the current economic paradigm.

The traditional response against
such a scenario is strong fiscal adjustment together with a sharp devaluation
of the currency. Despite official
statements and the differences (not
minor, it should be noted) between the major candidates, this
is a shared idea among their economic teams.

In the case of Daniel
Scioli, the Peronist candidate leading the opinion polls, his trusted economic advisors
(Miguel Bein and
Mario Blejer) avowedly oppose devaluation and seek a way out through foreign debt (now at extremely low
levels) and a massive State bond
issue. They insist, however, that
in order to be able to successfully do
so, it is essential to reach a quick
agreement with the vulture funds and
the financial markets - thus decidedly departing from the
current government’s standpoint. On the other hand,
they claim that Argentina must return
soon to a primary surplus, and advocate the end of
tax deductions for agricultural exports. Which is to
say, they are thinking of reducing public spending.

In the case of
Mauricio Macri, his spin doctors (Carlos Melconian, Jose Luis Espert, Miguel
Angel Broda) embody the most obtuse neoliberal orthodoxy of
the 90s. They are proposing strong fiscal adjustment,
the end of the wage indexing mechanisms, and the full liberalization of the currency market,
together with a sharp devaluation of the peso.

Finally, Sergio Massa seems to waver between "Sciolista" proposals (promoted by
Néstor Kirchner’s former economy minister Roberto Lavagna) and
"Macrista" measures (defended by the former
president of the Central Bank Martín Redrado).

The candidates show the same attitude on
civil and human rights. It is
very striking to witness the complete
disappearance of the debate on abortion and the very scarce insistence on the need for further research on the crimes of the last civic-military dictatorship and the
responsibilities of the Argentine business community.

In short, the leading
presidential candidates’ platforms show the willingness to put an end, wholly or in part, to the Kirchnerista model and its traditional banners. The objective
elements which can be seen today indicate
that Argentina is going to be characterized in the near
future by an attempt to "build a normal country" after the K anomaly.

However, how and if such a result will come about depends on some important
variables, such as the make-up of the next Congress and the attitude (favourable
or otherwise) of the unions. It
also depends on the capacity of the Argentine people to defend the civil, democratic, social
and labour rights they have won over the
years.

Remembering Eric
Hobsbawn and his definition of the Argentine working class as the most
pugnacious in Latin America, it would be very hazardous to say that, whatever
the result of the October 25 presidential election, a restoration in Buenos
Aires is to be anticipated.

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